Mundorf Corporation has two manufacturing departments--Forming and Assembly.The company used the following data at the beginning of the year to calculate predetermined overhead rates:
During the most recent month,the company started and completed two jobs--Job B and Job H.There were no beginning inventories.Data concerning those two jobs follow:
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.The amount of manufacturing overhead applied to Job B is closest to:

Question

Mundorf Corporation has two manufacturing departments--Forming and Assembly.The company used the following data at the beginning of the year to calculate predetermined overhead rates:
 During the most recent month,the company started and completed two jobs--Job B and Job H.There were no beginning inventories.Data concerning those two jobs follow:
 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.The amount of manufacturing overhead applied to Job B is closest to:

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Forming
 11ea7761_191f_f81e_81a5_65078a7c28a9_TB2580_00 Assembly
 11ea7761_191f_f81f_81a5_b30a556feb88_TB2580_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($70,200 + $4,500 = $74,700) to calculate the plantwide predetermined overhead rate as follow:
 11ea7761_1920_1f30_81a5_e13e75c50509_TB2580_00 The overhead applied to Job B is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $7.47 per MH x (6,100 MHs + 400 MHs)
= $7.47 per MH x (6,500 MHs)
= $48,555

Mundorf Corporation Has Two Manufacturing Departments--Forming and Assembly